Right, I'm looking more for an explanation of the politics behind it - i.e. why did one party back and it the other didn't? And why is this considered such a pivotal election?
The position advocated by Bryan was a bi-metal approach wherein there would be both silver and gold standards. This would have increased the money supply, since all the silver then in circulation could be minted as currency, thus leading to inflation. Farmers, silver miners and those generally in debt favored this.
Correct. Alexander Hamilton helped establish a bimetallic standard for U.S. currency in 1792, and this arrangement lasted for eight decades. However, in 1873 the United States followed a global trend and entered the Gold Standard with the Coinage Act of 1873. The Coinage Act ushered in a long period of deflation, where prices declined on average by over 1% every year until the end of the century (when improved extraction of gold processes were invented). The reason for this was that the supply of gold was limited, and yet the nation's industrial output was surging. Therefore, the price of goods went into decline.
The decline of prices hurt farmers, because farmers were net debtors- the farmers had to borrow in order to fund their equipment, mortgages and shipments of goods. As prices fall, they become caught in a debt-deflation cycle, where they are able to earn less every year from agricultural sales, although the amount of their debt does not change. In contrast, deflation was good for creditors- mostly bankers and financiers, based in the Eastern part of the country.
In addition, a severe economic depression began with the Panic of 1873 that was to last for the rest of the decade, and result in the first Republican loss of control in the House of Representatives in 1874, since the 1850s, and a Democrat winning the popular vote in 1876 for the first time since 1856. Another severe contraction began with the Panic of 1893, which led to huge Republican gains in the House of Representatives in 1894 and set up the election of 1896.
The deflation brought about by the gold standard act (the 'Crime of '73') combined with the economic depressions of the 1870s and 1890s led to the rise of populist movements centered around loosening the money supply by returning to a bimetallic standard. Under Grover Cleveland (President 1884-88, 92-96), both the Democratic and Republican parties supported the gold standard, while only the Populist party (1890-96) supported the bimetallic standard. However, in 1896 William Jennings Bryan's "Cross of Gold" speech at the Democratic convention in Chicago captivated the delegates and gave him the nomination of that party. The Populist party also nominated Bryan, but the Democrats' adoption of the bimetallic banner effectively ended the Populist party's cause d'etre and doomed its existence.
The Democrats split, with gold Democrat deserting the party and contributing to McKinley's win in 1896. By 1900 the economy had recovered and the issue was dead.
